More Google/China Stuff

An avalanche of opinion and reporting on Google -- great work there, Google people, shaming Beijing by publicizing its thuggish, criminal ways -- starting with the Wall Street Journal. Rebecca Mackinnon:

By announcing it will no longer censor its Chinese search engine and will reconsider its presence in China, Google has taken a bold step onto the right side of history.

Four years ago when Google entered the Chinese market and launched Google.cn, Chinese bloggers called it the "neutered Google." At the time, Google executives said the decision to bow to the Chinese government's censorship demands had been made after heated internal debates. They said they had weighed the positives and negatives and concluded Chinese Internet users were better off with the neutered Google than with no Google. They drew a red line under search and said they would not bring any other Google products containing users' personal information—including email and blogging—into China. They held to that line.

Over the past four years I tested Google.cn from time to time and compared its search results with the Chinese market leader, Baidu. I found that Google.cn tended to censor search results somewhat less than Baidu. This supported Google's argument that it at least gave Chinese Internet users more information than the domestic alternatives.

Google executives also pointed out that a notice appeared at the bottom of every page of censored results on Google.cn, informing users that some information was being hidden from them at the behest of Chinese authorities. In this way, the logic went, they were at least being honest with the Chinese public about the fact that Google was helping their government put blinkers on them.

The company's effort to walk a fine line between Chinese regulators and free speech critics ended up being unsustainable. Anticensorship activists still viewed its compromise as contributing to the spread of censorship around the world. On the other hand, the compromise was also unacceptable to Chinese authorities, who were unhappy that Google wasn't censoring as heavily as Baidu. Last year Google came under a series of attacks in the state-run media for failing to censor porn adequately when users—horror of horrors—typed smutty phrases into the search box.

China's treatment of Google, folks, is exactly what they will do to Taiwan -- no matter what cooperation is offered, China will not deal, will insist on what it wants and only what it wants, and will attack you no matter how well you cooperate. A lesson for Taiwan, and for the KMT.

Sternberg in WSJ takes the more cynical view that it is all about the low returns from the China market, whose revenue for Google is "only a few hundred million." He also instances another case where the Chinese government has apparently stolen proprietary technology....

A smaller example of the same phenomenon is Cybersitter. The Santa Barbara, Calif.-based producer of antipornography filter software is suing the Chinese government, claiming that the government's own filtration software, Green Dam Youth Escort, illegally copied nearly 3,000 lines of Cybersitter's own computer coding. The company is asking for $2.2 billion in damages stemming from the infringement.

The legal merits of the case are a matter of debate. But merely by filing suit Cybersitter is taking a bold step that could prove so embarrassing to Beijing that Cybersitter's own product could end up banned from China in retaliation. The family-owned U.S. company is willing to take that risk. "We're not at all concerned about whether we'll lose China as a customer," Jenna DiPasquale, Cybersitter's marketing director, says. In the past dozen years, Cybersitter has sold at most 15,000 copies of its software in China, compared to world-wide sales of four to five million. The company says the costs of not defending its code are much greater than the benefits of a presence in China.

WSJ offers in another piece, very balanced and informative:

Google has faced its share of business obstacles in China, some of which may be traced to government action. Its main search competitor, Baidu, has received government support to control 58% of the market, compared to Google's 36%. No doubt the fact that Google's revenues in China are what it calls "insignificant" make it easier to pull the plug.

But the problems go beyond Google. A company spokesman tells us that the decision to abandon the China market was the result of the hacking attack and a broad crackdown on the Internet in China. In the last year Chinese authorities have blocked YouTube, attempted to force computer retailers to pre-install the Green Dam filtering software, pressured Google and other search providers to further filter racy content, and allegedly launched a "DNS poisoning" attack on Google that led to the company's services crashing world-wide.

This is clearly an ongoing program by China. A friend related the tale of China's attempt to grab Seagate, which makes the Maxtor portable hard drives. First a Chinese firm attempted to buy the company. Then when Seagate refused to sell, the Chinese subcontractor for the drives infected one type of drive with a trojan horse that collected passwords, etc. Seagate was forced to recall the hard drives.

Another example: In October 2007, Kaspersky Labs inked a deal with the Huawei-3Com joint venture, H3C, as an original equipment manufacturer (OEM) for H3C servers. Kaspersky is, presumably, working closely with H3C, wholly owned by the "U.S. fir"m 3Com (corporate headquarters actually in Shenzhen) to “further enhance the performance of H3C’s security products to quickly respond to malicious software threats and therefore to protect customer’s network to be safe and sound” according the Chief Technology Officer at H3C.

However, as late as December 2006, every one of H3C’s Chinese employees remained on the personnel rolls at the Chinese telecom giant, Huawei, even though Huawei no longer owned any H3C shares. One Chinese news report noted that “They retain Huawei personnel employment numbers, Huawei stock ownership, and their internal corporate contacts, job descriptions (zhiwei) and ranks.” Therefore, Huawei likely continues to maintain all security dossiers and to control “work certificates” (gongzuo zheng) for all of H3C’s Chinese citizen employees. Where do you think their loyalties lie?

MORE:
Josh Schrei says more firms should follow Google's example.
Timeline of Google/China history
ChinaHush with evidence of proof for the security breach
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